Management of Performance Based Logistics – UL02-03

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Management of Performance Based Logistics – UL02-03

The objective of this project is to analyze existing tool of a process, compare them to other existing tool in industry, make improvement recommendations, and determine if approach could be used to evaluate new performance based logistics (PBL) contracts.


Crane – Naval Surface Warfare Ctr.

Research Team:

Gail W. DePuy, John S. Usher, John E. Ward, G. Don Taylor

Universities Involved:

University of Louisville

Start Date:


End Date:



The purpose of the study was to evaluate whether the sustainment engineering initiative and existing methodologies at NSWC-Crane could be used as a management tool for Performance Based Logistics contracts and agreements.
NSWC-Crane refurbishes many different types of mechanical and electrical devices used in military ships and aircraft for the US Navy. In the past, the Navy has forecast their requirements for replacement components and developed long term (12-month) schedules. NSWC-Crane would be contracted to supply according to the stated demand schedule. The risks and costs of forecast errors were absorbed by the Navy. Now, however, the Navy would like to transfer that responsibility directly to NSWC-Crane through a system called “Performance Based Logistics (PBL)”. Under such an arrangement NSWC-Crane would be responsible for managing the entire re-supply effort for specific components, including forecasting demand, and then producing to meet that demand in the most cost effective manner. The problem then becomes one of providing management with an effective decision analysis and costing tool to accurately forecast demand and appropriately cost the work. NSWC-Crane currently has a tool in place for use in determining the cost of technically refreshing legacy weapons systems. This business case analysis (BCA) tool provides decision support but has never been applied to the problem of PBL. The objective of this project is to evaluate the BCA tool and determine if it can be used to support management decisions within the PBL program. Particular effort is to be applied to evaluate the effectiveness of the application by considering the APS-116 PBL contract within Code 809 (microwave tubes for use in AEGIS Radar).